08.12.2009

Declaration by the Management Board and Supervisory Board of Demag Cranes AG on the recommendations of the "Government Commission for the German Corporate Governance Code" (Regierungskommission Deutscher Corporate Governance Kodex) according to paragraph 161 of the German Stock Corporations Act

Under Section 161 of the German Stock Corporations Act (AktG), the Management Board and Supervisory Board of listed German stock corporations are required to declare each year that the recommendations of the "Government Commission on the German Corporate Governance Code" published by the Federal Ministry of Justice in the official section of the electronic Bundesanzeiger (Federal Gazette) have been and will be complied with or, if not, which recommendations have not been or will not be applied and why not.

Demag Cranes AG can confirm that the recommendations published by the Federal Ministry of Justice in the official section of the electronic Federal Gazette with regard to the "Government Commission on the German Corporate Governance Code" have been complied with in full with the following exceptions since issuing the last declaration of conformity on 15 December 2008 and up to 4 August 2009, in accordance with the Code in force on 6 June 2008 and since 5 August 2009, in accordance with the Code in force on 18 June 2009.

a)     Clause 3.8 provides for the agreement of a deductible if the Company takes out a D&O policy on behalf of the Management and Supervisory Boards. Until 30 September 2009, Demag Cranes AG’s D&O insurance policy did not include a deductible for either the Management Board or the Supervisory Board, since the Management Board and Supervisory Board do not deem this to be either necessary or suitable for controlling the behaviour of the board members. For the same reason, the D&O insurance policy for Demag Cranes AG’s Supervisory Board has also not stipulated a deductible since 1 October 2009.

b)     In accordance with Clause 5.4.6, the members of the Supervisory Board should be paid performance-related remuneration in addition to their fixed basic remuneration. The Articles of Association of Demag Cranes AG do not include a performance-related component for members of the Supervisory Board, so that it can preserve the independence it must have to be able to carry out its monitoring function. The performance of this function should not be tied to any monetary incentives.

c)     In accordance with Clause 5.4.5, Supervisory Board members who are members of the management board of a listed company may not accept more than a total of three supervisory board mandates in non-group listed companies. The Supervisory Board member Robert J. Koehler is chairman of the management board of SGL CARBON AG, Wiesbaden, and has a total of four supervisory board mandates in non-group listed companies, including his position as member of the Supervisory Board of Demag Cranes AG. This does not affect his monitoring duties as a member of the Supervisory Board of Demag Cranes AG. Mr. Koehler has sufficient time to perform his mandate at Demag Cranes AG.

Apart from the above exceptions, the recommendations of the “Government Commission on the German Corporate Governance Code” in force on 18 June 2009 were fully met.

Düsseldorf 08 December 2009

The Management Board                                   The Supervisory Board


 


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